1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended July 31, 1999 | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ____________ to ____________ Commission File Number: 000-20132 THE BUCKLE, INC. (Exact name of Registrant as specified in its charter) <TABLE> <S> <C> NEBRASKA 47-0366193 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) </TABLE> 2407 WEST 24TH STREET, KEARNEY, NEBRASKA 68847 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (308) 236-8491 - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No | | The number of shares issued of the Registrant's Common Stock, outstanding as of September 8, 1999 was 21,663,199 shares of Common Stock.
2 THE BUCKLE, INC. FORM 10-Q INDEX <TABLE> Pages ----- <S> <C> <C> Part I. Financial Information (unaudited) Item 1. Financial Statements 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 Part II. Other Information Item 1. Legal Proceedings 13 Item 2. Changes in Securities and Use of Proceeds 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 (a) Exhibit 11, statement regarding computation of earnings per share (b) No reports on Form 8-K were filed by the Company during the Quarter ended July 31, 1999 Signatures 14 </TABLE> 2
3 THE BUCKLE, INC. BALANCE SHEETS (columnar amounts in thousands) (Unaudited) <TABLE> <CAPTION> ASSETS July 31, January 30, CURRENT ASSETS: 1999 1999 ---------------- --------------- <S> <C> <C> Cash and cash equivalents $ 42,760 $ 61,705 Short-term investments 28,276 26,691 Accounts receivable, net of allowance of $300,000 4,225 3,980 Inventory 68,764 49,411 Prepaid expenses and other assets 2,532 2,231 -------- -------- Total current assets 146,557 144,018 PROPERTY AND EQUIPMENT: 85,562 74,041 Less accumulated depreciation 34,908 34,798 -------- -------- 50,654 39,243 OTHER ASSETS 1,420 2,852 -------- -------- $198,631 $186,113 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 23,400 $ 16,817 Accrued employee compensation 7,643 16,919 Accrued store operating expenses 3,430 3,317 Gift certificates redeemable 1,244 1,593 Income taxes payable 2,190 1,337 -------- -------- Total current liabilities 37,907 39,983 STOCKHOLDERS' EQUITY: Common stock, authorized 100,000,000 shares of $.01 par value; issued 22,079,462 and 21,968,921 shares, respectively 221 220 Additional paid-in capital 39,047 37,431 Retained earnings 122,379 109,534 Unearned compensation - restricted stock (923) (1,055) -------- -------- 160,724 146,130 Total stockholders' equity -------- -------- $198,631 $186,113 ======== ======== </TABLE> See notes to financial statements. 3
4 THE BUCKLE, INC. STATEMENTS OF INCOME (amounts in thousands, except per share data) (Unaudited) <TABLE> <CAPTION> Thirteen Weeks Ended Twenty-six Weeks Ended -------------------- ---------------------- July 31, August 1, July 31, August 1, 1999 1998 1999 1998 ------------------ ----------------- ------------------ ----------------- <S> <C> <C> <C> <C> SALES, net of returns and allowances $ 79,584 $ 70,506 $159,272 $137,534 COST OF SALES (including buying, distribution and occupancy costs) 52,958 46,240 105,545 90,527 -------- ---------- -------- -------- Gross profit 26,626 24,266 53,727 47,007 OPERATING EXPENSES: Selling 14,331 12,812 29,144 25,764 General and administrative 2,425 2,141 4,920 4,366 -------- ---------- -------- -------- 16,756 14,953 34,064 30,130 -------- ---------- -------- -------- Income from operations 9,870 9,313 19,663 16,877 OTHER INCOME 314 333 888 855 --------- ---------- -------- -------- Income before income taxes 10,184 9,646 20,551 17,732 Income tax expense 3,809 3,608 7,707 6,680 --------- ---------- -------- -------- NET INCOME $ 6,375 $ 6,038 $ 12,844 $ 11,052 ========= ========== ======== ======== Basic income per share $0.29 $0.27 $0.58 $0.50 Diluted income per share $0.27 $0.26 $0.55 $0.48 Basic shares outstanding 22,079 22,001 22,061 21,965 Diluted shares outstanding 23,407 23,226 23,363 23,199 </TABLE> See notes to financial statements. 4
5 THE BUCKLE, INC. STATEMENTS OF CASH FLOWS (amounts in thousands) (Unaudited) <TABLE> <CAPTION> Twenty-six Weeks Ended July 31, 1999 August 1, 1998 ------------------- -------------------- <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 12,844 $ 11,052 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 4,220 3,001 Loss on disposal of assets 395 207 Amortization of unearned compensation 132 132 Changes in assets and liabilities: Accounts receivable (245) (1,069) Inventory (19,353) (4,579) Prepaid expenses and other assets (301) 29 Accounts payable 6,583 134 Accrued employee compensation (7,519) (5,050) Accrued store operating expenses 113 471 Gift certificates redeemable (349) (314) Income taxes payable 853 (17) -------- -------- Net cash flows from operating activities (2,627) 3,997 CASH FLOWS FROM INVESTING ACTIVITIES: Change in short-term investments (1,585) (7,266) Purchase of property and equipment (16,026) (9,437) Decrease/(Increase) in other assets 1,432 (1) -------- -------- Net cash flows from investing activities (16,179) (16,704) CASH FLOWS FROM FINANCING ACTIVITIES: Purchases of common stock (641) 0 Proceeds from the exercise of stock options 502 1,965 -------- -------- Net cash flows from financing activities (139) 1,965 -------- -------- Net decrease in cash and cash equivalents (18,945) (10,742) Cash and cash equivalents, Beginning of period 61,705 53,593 -------- -------- Cash and cash equivalents, End of period $ 42,760 $ 42,851 ======== ======== </TABLE> See notes to financial statements. 5
6 THE BUCKLE, INC. NOTES TO FINANCIAL STATEMENTS THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 31, 1999 AND AUGUST 1, 1998 (Unaudited) 1. Management Representation - The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the results of operations for the interim periods have been included. All such adjustments are of a normal recurring nature. Because of the seasonal nature of the business, results for interim periods are not necessarily indicative of a full year's operations. The accounting policies followed by the Company and additional footnotes are reflected in the financial statements for the fiscal year ended January 30, 1999, included in The Buckle, Inc.'s 1998 Annual Report. 2. Description of the Business - The Company is a retailer of medium to better priced casual apparel and footwear for fashion conscious young men and women. The Company operates their business as one reportable industry segment. The Company had 237 stores located in 32 states throughout the central, northwestern and southern areas of the United States as of July 31, 1999, and 209 stores in 28 states as of August 1, 1998. During the second quarter of fiscal 1999, the Company opened six new stores and substantially renovated three stores. During the second quarter of fiscal 1998, the Company opened five new stores and substantially renovated two stores. The following is information regarding the Company's major product lines, stated as a percentage of the Company's net sales: <TABLE> <CAPTION> Percentage of Net Sales Percentage of Net Sales Thirteen Weeks Ended Twenty-six Weeks Ended Merchandise Group July 31, 1999 Aug. 1, 1998 July 31, 1999 Aug. 1, 1998 ------------- ------------ ------------- ------------ <S> <C> <C> <C> <C> Denims 16.0% 21.0% 18.1% 22.3% Casual bottoms 4.2% 3.4% 4.3% 3.2% Tops (incl. sweaters) 35.9% 32.8% 33.9% 31.5% Sportswear/fashions 17.7% 16.9% 16.2% 16.4% Accessories 6.7% 6.2% 6.0% 5.3% Footwear 17.3% 18.7% 19.0% 20.3% Other 2.2% 1.0% 2.5% 1.0% ----- ----- ----- ------ 100.0% 100.0% 100.0% 100.0% ===== ===== ===== ===== </TABLE> 3. Net Income Per Share - Basic earnings per share data are based on the weighted average outstanding common shares during the period. Diluted earnings per share data are based on the weighted average outstanding common shares and the effect of all dilutive potential common shares, including stock options and warrants. 4. Accounting Pronouncements - In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" which will be effective for fiscal years beginning after June 15, 2000. The Company will adopt this Statement effective February 4, 2001. At this time, the Company believes the impact of adopting this Statement should not be significant to the results of operations or financial position. 6
7 THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Company's financial condition and results of operations during the periods included in the accompanying financial statements. RESULTS OF OPERATIONS The table below sets forth the percentage relationships of sales and various expense categories in the Statements of Income for each of the thirteen and twenty-six week periods ended July 31, 1999, and August 1, 1998: THE BUCKLE, INC. RESULTS OF OPERATIONS <TABLE> <CAPTION> Percentage of Net Sales Percentage of Net Sales ----------------------- ----------------------- Thirteen weeks ended Percentage Twenty-six weeks ended Percentage July 31, August 1, increase July 31, August 1, increase 1999 1998 (decrease) 1999 1998 (decrease) ------------ ------------- ------------- ------------ ------------- ------------- <S> <C> <C> <C> <C> <C> <C> Net sales 100.0% 100.0% 12.9% 100.0% 100.0% 15.8% Cost of sales (including buying, distribution and occupancy costs) 66.5% 65.6% 14.5% 66.3% 65.8% 16.6% ----- ----- ---- ----- ----- ---- Gross profit 33.5% 34.4% 9.7% 33.7% 34.2% 14.3% Selling expenses 18.0% 18.2% 11.9% 18.3% 18.7% 13.1% General and Administrative expenses 3.1% 3.0% 13.3% 3.1% 3.2% 12.7% ----- ----- ---- ----- ----- ---- Income from operations 12.4% 13.2% 6.0% 12.3% 12.3% 16.5% Other income .4% .5% (5.7)% .6% .6% 3.9% ----- ----- ---- ----- ----- ---- Income before income Taxes 12.8% 13.7% 5.6% 12.9% 12.9% 15.9% Income tax expense 4.8% 5.1% 5.6% 4.8% 4.9% 15.4% ----- ----- ---- ----- ----- ---- Net Income 8.0% 8.6% 5.6% 8.1% 8.0% 16.2% ==== ===== ==== ===== ===== ==== </TABLE> Net sales increased from $70.5 million in the second quarter of fiscal 1998 to $79.6 million in the second quarter of fiscal 1999, a 12.9% increase. Comparable store sales increased from the second quarter of fiscal 1998 to the second quarter of fiscal 1999 by $0.6 million or 0.9%. The comparable store sales increase resulted from an increase in the number of pieces sold, as the average price per piece of merchandise sold in the second quarter of fiscal 1999,compared with the fiscal 1998 second quarter, was unchanged. 7
8 THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales increased from $137.5 million in the first six months of fiscal 1998 to $159.3 million for the first six months of fiscal 1999, a 15.8% increase. Comparable store sales for the twenty-six weeks ended July 31, 1999 compared to the twenty-six weeks ended August 1, 1998 increased $5.0 million or 3.8%. Sales growth of 12.0% for this twenty-six week period was attributable to the inclusion of a full six months of operating results for the 11 stores opened in 1998 and the opening of 15 new stores in the first twenty-six weeks of fiscal 1999. Average sales per square foot increased 1.1% from $142.70 to $144.30. Gross profit after buying, occupancy, and distribution expenses increased $2.4 million in the second quarter of fiscal 1999 to $26.6 million, a 9.7% increase. As a percentage of net sales, gross profit decreased from 34.4% in the second quarter of fiscal 1998 to 33.5% in the second quarter of fiscal 1999. Gross profit increased $6.7 million for the first twenty-six weeks of fiscal 1999 to $53.7 million, a 14.3% increase. As a percentage of net sales, gross profit in the first six months decreased from 34.2% for fiscal 1998, to 33.7% for fiscal 1999. The decrease in gross profit as a percentage of net sales for both the three and six month periods of fiscal 1999 compared to the same periods of fiscal 1998 was primarily attributable to an increase in occupancy costs. This decline was partially offset by improvement in the actual merchandise margins for the three and six months of fiscal 1999 compared to the same periods of fiscal 1998. Selling expenses increased from $12.8 million for the second quarter of fiscal 1998 to $14.3 million for the second quarter of fiscal 1999, a 11.9% increase. Selling expenses as a percentage of net sales decreased from 18.2% for fiscal 1998 to 18.0% for fiscal 1999. Year-to-date selling expense rose 13.1% from $25.8 million through the first half of fiscal 1998 to $29.1 million for the first half of fiscal 1999. As a percentage of net sales, selling expense in the first six months decreased from 18.7% for fiscal 1998, to 18.3% for fiscal 1999. The primary reason for the improvement in selling expenses as a percentage of net sales is leverage provided by the adoption of the Company's 1999 Management Incentive Program. General and administrative expenses increased from $2.1 million in the second quarter of fiscal 1998 to $2.4 million in the second quarter of fiscal 1999, a 13.3% increase. As a percentage of net sales, general and administrative expenses increased to 3.1% for the second quarter of fiscal 1999 compared to 3.0% for the second quarter of fiscal 1998. For the first half of fiscal 1999, general and administrative expense rose 12.7% from $4.4 million for the six months ended August 1, 1998, to $4.9 million for the six months ended July 31, 1999. As a percentage of net sales, general and administrative expense decreased to 3.1% for the first half of fiscal 1999 compared to 3.2% for the first half of fiscal 1998. Decreases in general and administrative expenses for the first six months, as a percentage of net sales, resulted primarily from leverage provided by the adoption of the Company's 1999 Management Incentive Program, partially offset by slight increases in various expense categories. As a result of the above changes, the Company's income from operations increased $0.6 million to $9.9 million for the second quarter of fiscal 1999 compared to $9.3 million for the second quarter of fiscal 1998, a 6.0% increase. Income from operations was 12.4% of net sales in the second quarter of fiscal 1999 compared to 13.2% in the second quarter of fiscal 1998. Income from operations, year-to-date through July 31, 1999, was $19.7 million, a $2.8 million increase 8
9 THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS from the first half of the prior year. Income from operations was 12.3% of net sales for the first six months of both fiscal 1999 and fiscal 1998. For the quarter ended July 31, 1999, other income decreased 5.7%. For the six months ended July 31, 1999, other income increased 3.9%. The decrease in the second quarter was due to the loss on disposal of fixed assets related to write-offs recorded from the rollout of new point of sale systems and store remodels. The increase year-to-date is primarily due to additional interest income, as the level of cash and short-term investments was greater than in the same period of fiscal 1998 partially offset by the loss on disposal of fixed assets. Income tax expense as a percentage of pre-tax income was 37.5% in the first half of fiscal 1999 compared to 37.7% in the first half of fiscal 1998. LIQUIDITY AND CAPITAL RESOURCES The Company's primary ongoing cash requirements are for inventory, payroll, new store expansion, and remodeling. Historically, the Company's primary source of working capital has been cash flow from operations. However, the first half of each fiscal year is typically a period of decreasing cash flows created by various operating, investing, and financing activities. During the first half of fiscal 1999, the Company's had negative cash flow from operating activities of $2.6 million. During the first half of fiscal 1998, the Company's had positive cash flow from operating activities of $4.0 million. The uses of cash for both twenty-six week periods include payment of annual bonuses accrued at fiscal year end, changes in inventory and accounts payable for build up of inventory levels, and construction costs for opening new stores. The primary differences creating greater usage of cash this year versus last year are a greater build up of inventory, a higher level of capital expenditures and a higher level of bonuses paid. The Company has available an unsecured line of credit of $5.0 million and a $5.0 million line of credit for foreign and domestic letters of credit, with First National Bank and Trust Company of Kearney, Nebraska. Borrowings under the lending arrangements provide for interest to be paid at a rate equal to the prime rate published in the Wall Street Journal on the date of the borrowings. As of July 31, 1999, the Company had working capital of $108.7 million, including $42.8 million of cash and cash equivalents and short-term investments of $28.3 million. The Company has, from time to time, borrowed against these lines during periods of peak inventory build-up. There were minor bank borrowings during the first half of fiscal 1999 and no bank borrowings during the first half of fiscal 1998. During the first half of fiscal 1999 and 1998 the Company invested $10.5 million and $4.6 million, respectively, in new store construction, store renovation and upgrading store technology, net of any construction allowances received from landlords. The Company also spent approximately $1.9 million and $4.8 million in the first half of fiscal 1999 and 1998, respectively, in capital expenditures for the corporate headquarters and distribution center. During fiscal 1998, the Company completed its expansion to the corporate headquarters and distribution facility. The addition is approximately 124,000 square feet, added to the existing 9
10 THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 55,000 square foot building. The majority of the space is used for the distribution center, with approximately 7,800 square feet of new office space. The distribution center was completed in June 1998 and the new office space was completed in December 1998. The former distribution area was remodeled for use as store supply warehousing and offices, merchandising and advertising offices as well as new workroom, showroom and conference room space. The remodel of this phase was completed in March 1999. The next remodeling phase includes remodeling and reorganization of the existing office space. This phase was partially completed in June 1999 and is expected to be completed during the third quarter of fiscal 1999. The final phase of the remodel project is estimated to be complete during fiscal 1999. The total cost of the expansion plus all phases of the remodel project is estimated to be $8.5 million, of which approximately $6.5 million was incurred during fiscal 1998. Also during the second quarter of fiscal 1999, the Company purchased a second corporate aircraft at a cost of $3.6 million. The Company believes that existing cash and cash flow from operations will be sufficient to fund current and long-term anticipated capital expenditures and working capital requirements for the next several years. During the remainder of fiscal 1999, the Company anticipates completing approximately twenty additional store construction projects, including approximately twelve new stores and approximately eight stores to be remodeled and/or relocated. As of July 31, 1999, eight additional lease contracts have been signed, and additional leases are in various stages of negotiation. Management now estimates that total capital expenditures during fiscal 1999 will be approximately $22.5 million before any landlord allowances, estimated to be at approximately $1.5 million. SEASONALITY AND INFLATION The Company's business is seasonal, with the Christmas season (from approximately November 15 to December 30) and the back-to-school season (from approximately July 15 to September 1) historically contributing the greatest volume of net sales. For fiscal years 1996, 1997, and 1998, the Christmas and back-to-school seasons accounted for an average of approximately 40% of the Company's fiscal year net sales. Although the operations of the Company are influenced by general economic conditions, the Company does not believe that inflation has had a material effect on the results of operations during the twenty-six week periods ended July 31, 1999, and August 1, 1998. YEAR 2000 MATTERS Year 2000 Background - The Company recognizes that the arrival of the year 2000 poses a unique worldwide technological challenge as all computer information systems will require the ability to recognize the date change from December 31, 1999 to January 1, 2000 and forward to properly process transactions. Computer programs and hardware as well as software products that are date sensitive may recognize a date using "00" as the Year 1900 rather than the Year 2000. This could result in system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions or engage in normal business activities. 10
11 THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company's goal is to be Year 2000 compliant, meaning critical systems, devices, applications or business relationships have been evaluated and are expected to be suitable for continued use into and beyond the Year 2000, or contingency plans are in place. The Company has assessed its business computer systems, such as general ledger, payroll, accounts payable and inventory control, including distribution center functions. The majority of these systems, which are internally developed computer programs, have been corrected. The stores' point-of-sale systems are not internally developed but rather operate via third-party software systems. During August 1997, the Company entered into an agreement with a third-party provider to prepare the customized software necessary to bring the stores' Point-of-Sale system into Year 2000 compliance. This system has been rolled out to the retail outlets, which was completed in July of 1999. The Company presently believes that with modifications to its internally developed programs and with new third-party software, the Year 2000 issue will not pose significant operational problems for the Company. However, if such modification and replacements are not made, or not completed on time, the Year 2000 issue could have a material impact on the company. Year 2000 Costs - Total costs of this project to date have been incurred and expensed or capitalized in the normal course of operations of the Company. The total remaining cost of the Year 2000 project is estimated at less than $100,000. The majority of such cost is for the purchase of new software and hardware for replacement of all stores' Point-of-Sale systems and has been capitalized and paid for with cash flow from operations. The hardware and software replacement would have been done regardless of the Year 2000 issue to improve the technology in the retail stores. The remaining costs of the project are based upon the management's best estimates, using currently available information and making assumptions regarding future events including the continued availability of certain resources, third-party readiness and other factors. Risk Assessment - At this time, the Company believes its most reasonably likely worst case scenarios are: (1) the stores are unable to authorize bankcard sales electronically at the Point-of-Sale terminals nor verify checks tendered; and (2) that principal suppliers are not Year 2000 ready and cannot timely deliver their products. Although the Company does not believe that this scenario will occur, it has assessed the effect of such an event and does not expect that it would have a material adverse effect on the Company's financial condition and results of operations. The Company currently operates 240 retail stores in 33 states, has many suppliers, and believes that this will help mitigate any adverse impact. The company assessed this risk and believes that its contingency plans would mitigate the long-term effect of this scenario. In the event that a temporary disruption does occur, the Company does not expect that it would have a material adverse effect on its financial condition and results of operations. 11
12 THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Contingency Plans - Contingency plans will be prepared so that the Company's critical business processes can be expected to continue to function on January 1, 2000 and beyond. The Company's contingency plans will be structured to address both remediation of systems and their components and overall business operating risk. These plans are intended to mitigate both internal risks and potential risks in the supply chain of the Company's suppliers. FORWARD LOOKING STATEMENTS Information in this report, other than historical information, may be considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "1995 Act"). Such statements are made in good faith by the Company pursuant to the safe-harbor provisions of the 1995 Act. In connection with these safe-harbor provisions, this management's discussion and analysis contains certain forward-looking statements, which reflect management's current views and estimates of future economic conditions, company performance and financial results. The statements are based on many assumptions and factors that could cause future results to differ materially. Such factors include, but are not limited to, changes in product mix, changes in fashion trends, competitive factors and general economic conditions, economic conditions in the retail apparel industry, year 2000 issues, as well as other risks and uncertainties inherent in the Company's business and the retail industry in general. Any changes in these factors could result in significantly different results for the Company. The Company further cautions that the forward-looking information contained herein is not exhaustive or exclusive. The Company does not undertake to update any forward-looking statements, which may be made from time to time by or on behalf of the Company. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has evaluated the disclosure requirements of Item 305 of S-K "Quantitative and Qualitative Disclosures about Market Risk," and has concluded that the Company has no market risk sensitive instruments for which these additional disclosures are required. 12
13 THE BUCKLE, INC. PART II -- OTHER INFORMATION Item 1. Legal Proceedings: None Item 2. Changes in Securities: None Item 3. Defaults Upon Senior Securities: None Item 4. Submission of Matters to a Vote of Security Holders: (a) June 4, 1999, Annual Meeting (b) Board of Directors: Daniel J. Hirschfeld Robert E. Campbell Dennis H. Nelson William D. Orr Karen B. Rhoads Ralph M. Tysdal Bill L. Fairfield NUMBER OF SHARES* ----------------- For Against Abstain Del N-Vote --- ------- ------- ---------- (c) 1. Election of Board of Directors: Daniel J. Hirschfeld 20,243,258 0 8,549 Dennis H. Nelson 20,243,258 0 8,549 Karen B. Rhoads 20,243,013 0 8,794 Bill L. Fairfield 20,240,398 0 11,409 Robert E. Campbell 20,241,070 0 10,737 William D. Orr 20,240,765 0 11,042 Ralph M. Tysdal 20,242,893 0 8,914 2. Appoint Deloitte & Touche LLP as independent accountants. 20,233,992 11,841 5,974 3. Approval of the Company's 1999 Management Incentive Plan 18,692,874 266,511 21,150 1,271,272 *includes only shares represented in person or by proxy at the annual meeting (d) None Item 5. Other Information: None Item 6. Exhibits and Reports on Form 8-K: (a) See Exhibit 11, statement regarding computation of earnings per share. (b) No reports on Form 8-K were filed by the Company during the quarter ended July 31, 1999. 13
14 THE BUCKLE, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE BUCKLE, INC. Dated: September 14, 1999 /s/ DENNIS H. NELSON ----------------------------------- DENNIS H. NELSON, President and CEO Dated: September 14, 1999 /s/ KAREN B. RHOADS ----------------------------------- KAREN B. RHOADS, Vice President of Finance and CFO 14